TOPIC: The REAL reason for the abysmal PPS

I was going to write a response to Franshei´s post in the Cytxer´ "twilight zone" thread, but decided against that, since I believe what I was going to write has a lot to do with the real reason for why we are where we are.

And that reason is this: the Cytori Donkey syndrome

A Dutch proverb says: Een ezel stoot zich geen twee maal aan dezelfde steen.
"A donkey does not bump into the same stone twice." Avoid making the same mistake twice".

Until OA was started in 2014, clinical trials have only been conducted by Cytori THEMSELVES in breast reconstruction, which started in 2007 and several cardiac trials, which commenced a bit later due to IRB approval issues in Holland .

RESTORE II - 73 breasts reconstructed of women who had lumpectomy, was a clinic which was badly designed by ultimately reasonably successful, since the patients were happy with the result. It worked - the inputted fat grafted and it looked good.
Still- after approval in the UK- even after a positive recommendation from NICE, the NHS balked at the procedure and gave it a very low DRG rate, why????
Of course, it did not save any money for the national health insurance, since women with deformed breasts generally were not treated and this procedure just added cost to the system. That was key- but even more key was that the procedure was highly labor intensive for the surgeon. It was more "fat sculpting" by adding droplet for droplet of fat instead of dumping many cc´s of fat in the breast. Four to five hours of surgery time compared to one to one and a half for fitting a breast implant.
More natural or not- simply uneconimical in all aspects.
One think, BOD and management would have learned after this disaster which erased 4-5 years of development and probably 100 million of development money.
No- they did NOT- the Cytori donkey managed to bump exactly the same stone again...

From all the video´s we saw from the PRECISE procedure and the talks Emerson Perin had on the treatment, some of us should have been warned also. The procedure with at least 15 injections in the myocardium guided by NOGA, was exactly the same issue as the sculpting of breasts.
I got it myself when I read the stories of Mac (who used to read here too-a long time ago) of his experiences in the ATHENA trial, where he said, he was on the operating table for most of the day and the surgeon kept hauling the stem cells many times to insert into his heart (he later thought he had placebo- the poor man)
Does anybody think that the ATHENA procedure would ever fly anywhere if it takes four plus hours for an interventionalist to do a STANDARD treatment (at very weak and sick patients)????
No- that is plain stupidity and will never become a commercial success. With the delivery techniques we discussed which Okyanos was using, the answer probably would be different. But you cannot turn back the clock. Basically this is another 100 Mio down the drain, but is a viable procedure when done differently.
Anyway- the Cytori technology in the future could be "a game changer" for diabetes type 2, anti-aging or RA/MS, where you dump solid portions of cells IV or intra-muscular in a patient and is done after 10 minutes. Thats the future which will work.
OA surely is a quick thing within 30 minutes and the report of Hedrick that "The cell injection procedure took approximately a half hour and there were no periprocedural complications" on the finger injections on the scleroderma patient is probably comparable and commercially viable.
With the design of RESTORE II and PRECISE/ATHENA the therapies were NOT commercially viable. In this respect RothCo was right with his often used verb- see below image...

However the new "chances" make a lot more sense- I think Hedrick learned the hard way, but the stupidity of BOD in the past still should have consequences, I believe.

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Board moderator and Site-owner. I still regret the day I started analysing the prospects of MacroPore (now Cytori) back in 2004- a left-over from the tech-bubble at that time from the century change in my portfolio- and became addicted to Cytori´s fat cell technology.

Fas, your comments remind me of my own, but with more vegetables around the plate.

Not only did they waste all this money, but also all the years that we are starting AGAIN, starting now!

Assuming Marc has learned and will not pull another "DOV meeting in a conference", then we have years to go and some hundred million more dollars needed.. back then with the mean price at 4.44 it was easy to dilute 10 million shares, now we need hundreds of million more..... The timing is everything.

An old man can be a king if he had the youth of a young.

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Not only did they waste all this money, but also all the years that we are starting AGAIN, starting now!

That is exactly where we disagree. The tech works and there are two phase III applications which obviously-since the tech works- will succeed and will be attractive to surgeons to perform- since easy- and for patients to "want", since they have few - even NO other viable medical alternatives.

Time will tell...but I am rather confident.

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Board moderator and Site-owner. I still regret the day I started analysing the prospects of MacroPore (now Cytori) back in 2004- a left-over from the tech-bubble at that time from the century change in my portfolio- and became addicted to Cytori´s fat cell technology.

I would love to know - and I have asked you before - when you think they will realize a true/first revenue from anything currently in phase III?

I think too that Hedrick is really being conservative with his timelines of enrolling and subsequent FDA review etc. So late 2017 is my target for first revenues.

However- I agree with DOV that OA could finally be the app that attracts a suitor, which will solve the cash- and shares issue. If you read Centeno and just ignore what he writes of fat, you will get the insight that cell therapy has a big future in orthopedics. And Cytori is pretty well positioned in that space- despite the donkeys in callan Road.

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Board moderator and Site-owner. I still regret the day I started analysing the prospects of MacroPore (now Cytori) back in 2004- a left-over from the tech-bubble at that time from the century change in my portfolio- and became addicted to Cytori´s fat cell technology.

But you lost me at DOV and a suitor/partner talk from my past experience

So I guess we are back to step 1, which is let's see how the next 12-18 months go before anyone wants to look at this bride-2-b?

It's easy to calculate how many more shares then, so.....

OA results should come Q3 2016 I believe. Since Cytori is looking for a partner to do & finance the pivotal (i.e. approval trial), DOV assumes the money would come sometimes after that- I agree and concur with that.

Even my partner is getting "somewhat" hot with Cytori again....and that says something, since he and his clients own a lot more shares than Roth, the DOV clan etc etc.... and have been around almost as long as I have..

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Board moderator and Site-owner. I still regret the day I started analysing the prospects of MacroPore (now Cytori) back in 2004- a left-over from the tech-bubble at that time from the century change in my portfolio- and became addicted to Cytori´s fat cell technology.

I would like to clarify a typo by Fas if he intended to repeat what I posted recently. Fas wrote:

OA results should come Q3 2016 I believe. Since Cytori is looking for a partner to do & finance the pivotal (i.e. approval trial), DOV assumes the money would come sometimes after that- I agree and concur with that.

Not what I said, but what Hedrick said: The phase III OA trial could start as early as Q3, 2016. Then he said something like: "we would seek a partnership to fund that although we may have other alternatives." He went on to say that they would begin planning the details for this phase III trial in the fall of 2015. They expected the FDA to require 400 patients and cost $20 million.

What I said was: For Hedrick to be correct that the phase III trial could start as early as Q3, 2016, a partnership must be consummated at least three months prior to that. 13 week exams for all 94 patients in the ACT-OA trial will be completed on September 10th assuming exact timing. The first patient had their 13 week exam on May 12th. 26 week exams will be completed technically on December 10th and the data from these exams will be released to shareholders in Q1, 2016. This 26 week data will be the first Phase II data Cytori has ever released on any indication.

Based on Hedrick's comments on drafting a plan for the phase III trial in the fall of 2015, I am POSTULATING that the 13 week data will be factored into this planning process. I am also POSTULATING that this data could be shared with potential partners. It is my OPINION, that a partnership for the OA indication must be consummated months before the partner writes a check to start a $20 million trial. If that trial is to begin when Hedrick stated it could, then it is my OPINION that the partnership must be signed somewhere between October and April.

The trap here is that everything hinges on the phase III trial starting in late summer of 2016.

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* "The first patient had their 13 week exam on May 12th. 26 week exams will be completed technically on December 10th and the data from these exams will be released to shareholders in Q1, 2016"
So now we are buying this company on a 13 week data that needs 12 month data and know that it works, how? I have done studies on how a double blind works and it is NOT this easy to know the results by looking at patients in their first visit.

The rest is just opinion and such...

So Marc thinks the moment the 12 month is available he will opt out from review+peer review+publish (the cornerstone of everything he believed would legitimize the technology) and land a 20 million contract (which really not that hard with any semi-ok results) to start something in late 2016 and that data will require 12month+review+peer review (AT LEAST)...

it is also my OPINION that this is wishful thinking and there is no way Marc will stay with these timelines. however, in the best case scenario we as shareholders will not know the phase III results anytime before 2018 (Best case scenario)... it should take a couple of more years before we can start treating people (but let's forget about that for now)

Sounds familiar to me...

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Harris' appointment is interesting (direct report to San Diego, not to Tokyo). His locality is also interesting (Northern Asia and not Europe).

My speculation is EU is for partnerships (Hayden's fertile grounds in planted with so many so called approved uses for the celution system) and Northern Asia (Japan, Korea, even Eastern Russia) is for immediate market growth (traditionally Japan has contributed up to 80% of revenue and now almost zero).

CYTX is now entering the second year of the so called turnaround and the game plan appears to be changing (for the better?).

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Mr Hedge, I think CYTX needs a lot of cash to fund the US clinical trials and various activities in Japan, etc. The desperation for cash has driven the company to sell shares and warrants at 33 and 40 cents ( to generate about $ 5 million).

As WST has pointed out, some of the current insider buys may mean pushes to allow selling shares as indicated

There have been many discussions here re reverse split. I personally think that with about 165 million shares outstanding and the need to generate cash to support the US clinical trials, the company may have to do a reverse split in the near future. A reverse split may come even if the PPS would go up to over $ 1 during the next January Effects. Right now, the only way to avoid this is a sizeable EU partnership as DOV may have suggested).

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***As WST has pointed out, some of the current insider buys may mean pushes to allow selling shares as indicated***

Not exactly sure what you mean here or what WST pointed out...just don't remember. Without checking I thought the insider buys came after the last financing. Unknown at what PPS the $0.40 warrants get converted. Selling sure came in as we approached that price though. "Someone" may want to prevent the conversion as long as possible.
As far as a stock split....who knows. As long as we maintain market cap requirements they should get a 6 month extension which takes us well into Q2 2016 to get above a $1. Also unknown is if management has a preference on the stock split subject.

DOV
Last time CYTX had such a event the responses and what questions were addressed were limited so perhaps it has limited the enthusiasm to pose questions. Also, I know I was away for the holiday and gave it little thought, others may be in the same boat.
Maybe someone will ask for a more definitive CTX2 rollout timeline.
Addressing their "plan" for Japan beyond the SUI trial would be nice. Other indications, potential partnerships vs going it alone, etc.

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Regarding questions for Hedrick, I think people are simply tired with this CYTX drama, until there are some solid clinical and/or financial results. People are tired with all the promises. I think Hedrick will keep talking what is already known (published in the press with a little bit more color) to just a few "tired" listeners this time around.

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